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PZU SAPZU insurer works on creating holding structure
Listed insurance group PZU is working on the creation of a holding structure; it hopes that after the change, the efficiency of the group's capital management will improve, said PZU's acting CEO Andrzej Klesyk. An analysis of the optimal legal structure is planned in the second quarter of 2025, and the reorganisation of the structure will start in the second half of 2025. The creation of the holding company does not imply a delisting of banks.
"For the last few weeks, we have been working on the concept of a holding company. We want to create it, we are entering very uncharted waters, there is a lot of detail on how we will carry out such a process," CEO Klesyk said.
He pointed out that this would improve efficiency in managing the group's capital, optimise capital requirements and increase flexibility.
"Due to the fact that we have banks in the structure, this need has arisen much more strongly [of transformation to a holding company - PAP ed.]," Klesyk said.
PZU's CEO announced that currently the surplus capital relative to the target level is about PLN 6 billion (EUR 1.43 bln), and due to the requirements of the Solvency II directive coming into force, about PLN 5.5 billion (EUR 1.31 bln) of this surplus will disappear.
"The free capital will then decrease to around PLN 600 million. We need to have more. If we create a holding and the supervisor accepts it, we are talking about PLN 3-4 billion of capital surplus despite Solvency II coming into force," Klesyk said.
The CEO reported that PZU is focusing on operationalising its strategy but is raising internal ambitions in all major business lines.
"It cannot be the case that a leader like PZU grows slower than the market. We really need our targets to be much more ambitious," Klesyk stressed.
In his view, the real value of the PZU group compared to the current stock market valuation is much higher.
"The market discounts our value (...). Most likely due to the highly complex structure that we cannot achieve synergies from these businesses," Klesyk said.
He added that 25 percent of the group's customers have PZU insurance and a product from another company in the group and there is a high potential for cross-selling within the PZU group.
PZU said on Thursday that a holding structure would be designed for the PZU group as part of its current strategy.
According to the CEO, the holding entity could take care of the real management and strategic dimension, leaving the direct operational activities to the individual companies. In his view, the change will translate positively into business efficiency, as well as the results achieved.
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